GrubHub Stock Shorts Could Be Sweating Ahead of Earnings

GRUB shorts have been in covering mode, but plenty of bearish bets are still levied toward the stock

Managing Editor
Oct 24, 2017 at 12:05 PM
facebook X logo linkedin


Earnings season is hitting high gear, with a number of stocks already delivering earnings wins. Looking ahead, online restaurant delivery service GrubHub Inc (NYSE:GRUB) is slated to unveil its quarterly results before tomorrow's open. Here's a closer look at how GRUB stock has been performing ahead of earnings, and how traders both in and out of the options pits have been positioning themselves.

GrubHub stock is up 0.3% today to trade at $51.55, paring a portion of yesterday's 1.7% loss -- which came on news that Amazon's smartphone app will soon allow take-out orders. Despite the looming presence of FAANG rivals, GRUB stock has managed to add 37% year-to-date, and hit a record high of $57.61 as recently as Sept. 7.

Bigger gains could be on the horizon, too, should the equity's post-earnings history repeat itself. GRUB shares have moved higher the day after earnings in the last two quarters by an average of 15.9%. On average, the equity has swung 14.4% in the subsequent session, regardless of direction, following the last eight reporting periods. This time around, GrubHub stock is pricing in a slightly larger move of 14.6% -- and another move to the upside could vault GRUB stock to a new all-time high north of $59.

A short squeeze could also help fuel GRUB's charge. Short interest decreased by 13% during the last reporting period to 16.82 million shares. However, this still represents a whopping 28% of GRUB's total available float. It would take more than nine days for shorts to fully cover their positions, at the stock's average daily trading volume.

A number of options traders appear to be bracing for a post-earnings volatility crush, too. The stock's weekly 10/27 47-strike put has seen the biggest increase in open interest during the past two weeks, and Trade-Alert suggests most of these puts were sold to open. The last time GRUB traded below $47 was ahead of its early August earnings report.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI